Demand for telehealth abortions spiked after a recent FDA ruling. How will startups fare in a post-Roe America?
As the dust settles from the Supreme Court’s overturn of Roe v. Wade, abortion pills have become a focal point in the next legal battle for abortion access.
Just hours after the SCOTUS decision in June, Attorney General Merrick Garland warned states they cannot ban the widely used abortion medication mifepristone, which the Food and Drug Administration first approved in 2000. Garland’s remarks suggest an upcoming tussle between state and federal laws on abortion pills, posing potential problems for telehealth abortion providers.
Earlier this month, President Joe Biden signed an executive order calling for his administration to protect abortion access, including access to abortion medication. The executive order is by no means a fix-all for the constitutional right to abortion now gutted by the Supreme Court, but rather a means to preempt state bans on abortion medication, says Dave Gacioch, a healthcare litigation lawyer and partner at McDermott Will & Emery. “I think it remains to be seen where those boundaries will fall because the issue is very complicated,” he says.
Medication abortions accounted for more than half of U.S. abortions in 2020, a number that likely spiked after the FDA announced last December that it would permanently allow abortion medications to be sent by mail. That decision quickly gave rise to abortion telemedicine, the latest digitization of health care.
Virtual abortion care has made accessing the procedure easier and safer for many, researchers at the University of British Columbia have found. Patients can meet with doctors from the comfort and privacy of their homes and receive medications that induce abortion—mifepristone and misoprostol—in the mail within days. Investors are also taking notice, and have increasingly backed telehealth abortion startups since 2021.
State lawmakers, however, are moving to limit, if not fully restrict, the use of telehealth services for medication abortions. Nineteen states already banned virtual access to abortions before the overturn of Roe, requiring a patient see a physician in order to access the medications. With Roe overturned, more states are expected to follow suit or do away with abortion telehealth access altogether.
“Some of these state laws that frustrate tele-abortion have been on the books for some time. This isn’t new, this is how they’ve always operated.” says Stacey Callaghan, a lawyer and partner at McDermott Will & Emery who specializes in health law. “This will be a heavily litigated area.” On the opposing end, several states, including Connecticut, New York, and California, have approved legislation that protects access to telemedicine abortion.
A complicated web of state and medical restrictions stand in the way of gettig telehealth abortion access to patients in restrictive states. Patients will likely have to travel out of state to access telehealth services, which has its own challenges. Attempting to bypass state bans by using VPNs won’t help patients in these states either, because providers, like Abortion On Demand, use software to confirm the physical location of a patient’s computer. Moreover, abortion medications are only authorized for up to 10 weeks of pregnancy, but most people don’t realize they’re pregnant until around six weeks gestation, leaving a tiny window to arrange travel to a different state and receive reproductive virtual care. Logistically, it’s easier for a patient to travel to a state that allows abortions and undergo the procedure in person.
“Telehealth is not going to be the panacea for solving all the problems that overturning Roe is going to unleash. We are still going to need independent abortion clinics providing in-person care,” Dr. Jamie Phifer, the founder and medical director of abortion telehealth provider Abortion On Demand, says.
Still, telehealth services can help lighten the patient load at brick-and-mortar clinics by serving individuals who already live in states that permit abortions. Those states can also expect to see a sharp rise in travel patients seeking care. Kiki Freedman, CEO of telehealth provider Hey Jane, says the number of patients whose nearest clinic is in California will increase 3,000% post-Roe. In the midwest, there will be a nearly 8,700% increase in patients whose nearest clinic is in Illinois.
“We know that our colleagues who work in brick-and-mortar clinics are going to continue to see big increases in requests for appointments and longer wait times for in person care. That’s where we feel that we as a telehealth model really come in,” Cindy Adam, a nurse practitioner and CEO of telehealth provider Choix, tells Fortune. “We hope that this model helps to alleviate capacity issues, and really reserve those in-person visits for people who require it, or who prefer in-person care.”
That isn’t to say people in banned states have no way to access abortion medication online. They just may not be able to obtain it legally. Overseas providers, like the Austria-based nonprofit Aid Access, have said they will continue to mail abortion medication to patients in banned states (though the FDA has its eye on the organization’s extrajudicial operations). But for U.S. providers who want to stay out of legal trouble, state bans, or federal restrictions if Republicans regain a Congressional majority in November, on mailing medications bar them from providing care to these patients.
“[Mailing medications illegally] won’t happen through my organization as I follow all legal requirements, and I need to make sure that I can continue to employ my people and make sure that they’re safe. But there are players in the field that will do that, have been doing that, and will continue to do that,” says Melissa Grant, COO of carafem, a virtual and in-person abortion provider.
“It’ll be interesting to see where this country stands up, whether they want to allow it to happen through regular businesses who can be legislated, but clearly understand where the safety parameters are… or if we want to subject people to strictly getting it through backchannels, which was already happening,” she adds.
Treating patients in abortion restrictive states can also put medical practitioners’ licenses at risk. And often, when providers lose their license in one state, it can lead to losing their license in others.
“If one medical board brings an adverse action against the licensee, that can serve as a trigger to other states’ medical licensure board actions,” McDermott’s Callaghan says.
The B2B opportunity
One way for abortion providers to expand their business is through employer partnerships. Virtual abortion providers acknowledge that such business deals are in the early stages, but the opportunity exists: employers already have an established track record of partnering with reproductive benefits providers. Carrot Fertility, a global fertility benefits provider, was already processing $11 million in claims from employers in early 2020, well before the pandemic-driven telehealth boom, and closed a $75 million Series C in 2021. Companies like Peloton, Slack, and Stitch Fix offer employees telemedicine benefits that include comprehensive reproductive care. While most reproductive health providers don’t offer telehealth abortion care, the healthcare startup Tia added abortion care for patients in New York and California in May.
Just The Pill, a virtual abortion provider, says its held talks with several companies about telehealth abortion benefits. Choix, a virtual reproductive care startup that operates in California, Colorado, and Illinois, plans to use its recent seed funding to explore employer partnerships.
Employer partnerships can help “increase awareness around the availability, safety and efficacy” of virtual abortion care, Choix’s CEO says.
While the Supreme Court’s ruling creates a plethora of new challenges for providers to overcome, the difference between pre- and post-Roe abortion care isn’t exactly night and day.
“This is obviously a huge shift constitutionally that will create even greater restrictions in this country, but we’ve seen growing restrictions for the past two years across the country, and the right to abortion care has never been applied equally in the States since the original ruling,” Adam says. Now, as employers catch on to the importance of abortion access as a workforce issue, Adam is excited to forge new partnerships with interested parties.
“We are looking forward to working with employers who value the right to abortion care, and include the full spectrum of reproductive health care as part of their benefits, as opposed to just pregnancy care or postpartum care,” she says.